Collective redundancies

This page was last modified on 04-03-2016

An employer who intends to dismiss, for reasons that have nothing to do with the employee's person, at least 7 employees over a period of 30 days or at least 15 employees over a period of 90 days must apply a collective redundancy procedure.

the employees directly in the case of businesses who regularly employ less than 15 employees and therefore do not have a staff delegation;

the employees concerned by the redundancy.

It should be noted that joint works committees (also "joint works councils") will cease to exist after social elections which take place after 1 January 2016. As from these elections, the tasks and duties assigned to joint works committees will be transferred to the staff delegations in companies which had at least 150 staff during the 12 months preceding the first day of the posting of the announcement of elections.

Until these elections, the joint works committees currently in place will continue to carry out their tasks.

concern at least 4 dismissals for reasons not related to employee behaviour. All other terminations of employment contracts by the employer for reasons that have nothing to do with the employee's person, such as voluntary departures, redeployment, early retirement, etc. are assimilated to redundancies.

In the event of an agreement between the social partners

In the event of failure of negotiations between the social partners

Information of ADEM and staff representatives

Before initiating a collective redundancy, the employer must begin negotiations with the staff representatives in order to establish a redundancy plan for the individuals concerned.

In order to do this, he must:

inform the staff representatives of his intention to initiate a collective redundancy in writing and preferably before the start of negotiations, or at the latest at the start of negotiations, indicating notably the:

detailed and justified motives for initiating a collective redundancy;

number and categories of employees to be made redundant;

number and categories of employees who are usually employed;

period during which the redundancies will take place;

criteria used to identify the employees to be made redundant;

calculation method of the financial compensation which goes beyond the amounts foreseen by law or the collective agreement, or failing this, the reasons for refusing the compensation;

send this information to the National Employment Agency (Agence pour le développement de l'emploi - ADEM) at the latest at the start of the negotiations, together with a copy of the written communication addressed to the staff representatives, informing them of the collective redundancy . ADEM will forward a copy to the Inspectorate of Labour and Mines (ITM);

provide the staff representatives or, if required, the employees, with a copy of the notification sent to ADEM.

The staff representatives may then report their observations to ADEM, which will forward a copy to the ITM.

The negotiations may then begin.

Negotiation of the redundancy plan

The negotiations must concentrate on the possibilities of preventing or reducing the number of redundancies and limiting the consequences by means of:

internal redeployment in the company;

retraining;

reintegration on the job market;

a more favourable financial compensation than established by law.

Businesses with an employment maintenance scheme approved by the Minister of Labour and Employment during the 6 months prior to the start of the redundancy plan negotiations must not renegotiate the measures stated in the employment maintenance scheme but only negotiate a possible financial compensation.

The minimum notice period of 75 days must be respected. The deadline shall be extended according to the legal notice periods in relation to length of service and the applicable statutory or contractual provisions.

The Minister of Labour shall, if he deems it necessary:

extend the minimum notice period to 90 days;

reduce the notice period to the legal notice period as recognised by law, in the individual employment contract, in the collective agreement, etc.

In this case, the employees and the employer must be informed of the extension or reduction of the deadline and its reasons at the latest on the 15th day before the expiry of the initial deadline.

The employer and the employee representatives have 15 days maximum to reach an agreement on either the redundancy plan or on the fact that the negotiations have failed.

Agreement between social partners

If the negotiations are successful, the redundancy plan must be put in in writing and at least contain the measures agreed upon in terms of redeployment, retraining, reintegration and financial compensation as well as the opinion of the parties regarding these measures.

After being signed by both parties, a copy of the redundancy plan must be sent without delay to the ADEM which, in turn, will send a copy to the Inspectorate of Labour and Mines (Inspection du travail et des mines - ITM).

Disagreement between social partners

If the negotiations fail, all parties involved must:

draft and sign a report which documents the impossibility to draw up a redundancy plan and its reasons;

send, without delay, a copy of the report to ADEM, which in turn will send a copy to the ITM;

jointly inform the National Conciliation Service (Office national de conciliation - ONC), at the latest 3 days after having signed the report, stating the names and positions of the members who will take part in the joint conciliation committee (on both the employer's side as on the employee's side);

meet, after being summoned by the chairman of the ONC, in the framework of a joint conciliation committee (the chairman of the ONC will summon the parties within 2 days for a first meeting which must take place at the latest within 3 days of the summons);

close the proceedings at the latest 15 days after the first meeting and record its conclusions in a report;

If the intervention of the ONC does not allow to conclude a redundancy plan, the business can dismiss the chosen number of employees without a redundancy plan as soon as the non-conciliation report has been filed, by following the terms and the procedure that apply to individual dismissal but by complying with the minimum notice periods for collective redundancies.

or in the event where the parties have failed to reach an agreement, before the non-conciliation report of the ONC's joint conciliation committee has been signed.

If a redundancy is announced before these conditions are met, it may be declared null and void and can be appealed by the employees.

Tax exemption for voluntary departure allowance or severance pay

Employees may benefit from tax exemption for their voluntary departure allowance or severance pay from their employer, namely in the following situations:

in the event of a collective redundancy due to the complete or partial closure of a business;

when the departure allowance is set in a redundancy plan.

The allowances received are therefore tax exempt for up to 12 times the monthly minimum social wage for unskilled workers on 1 January of the tax year during which the first payment of the allowance is made.